Congressional Republicans have repeatedly raised taxes on donation revenues at certain universities in order to crack down on anti-Semitism allowed on campus amid President Donald Trump’s wider pressure campaign on universities.

GOP lawmakers are considering several laws that will raise the tax rate of 1.4% on elite universities’ contributions and increase the number of donations at private universities that are subject to tax. The revenue-generating proposal now helps Congressional Republicans embed a variety of options to offset Trump’s legislative priorities in the massive tax and spending packages that Congress is currently negotiating. (Related: Trump Administrators freeze another $1 billion with NIH grant to Harvard University)

It was found at Harvard University, the richest university in the world. Donation Of the approximately $53 billion in fiscal 2024, approximately It’s equal The total size of the Middle Eastern nations in Jordan’s economy exceeds the GDP of around 100 countries. Nevertheless, university contributions are profitable Paid The federal government had only $45 million in taxes in 2024.

A fund is a collection of donated assets invested by a university to provide a lasting mission. Harvard’s contributions consist of over 14,000 individual funds, of which more than 80% have specific restrictions on how they can spend.

Echelon Insights’ January 2024 poll Found Approximately 50% of voters will support laws that tax donations from private universities. Only 20% of voters said they opposed the law.

Congressional Republicans first targeted the huge donation of elite universities in 2017 by imposing a 1.4% excise tax on the net investment returns of certain wealthy universities. Taxes on university contribution profits will not expire and are a permanent part of the tax law.

Taxes on fund income currently apply to universities with donated assets of more than $500,000 per student. Only 56 universities Paid The 2023 donation tax raised approximately $380 million in revenue from US government funding.

Congressional Republicans are trying to enact an extension of the 2017 Trump tax cut expiration provision as part of a Trump-backed tax and spending package that will allow GOP-controlled Congress to avoid Democrat opposition by passing the law by simply majority votes.

GOP lawmakers are considering potential revenue streams and sudden spending cuts to help the president pay tax policies. The cost of extending the 2017 tax cut expiration provision will cost around $4 trillion over a decade. According to To the Bipartisan Policy Center. Congressional Republicans are also considering the president’s other tax priorities. This includes tips, overtime salaries, taxation on Social Security benefits, and increased state and local tax credit caps.

Republican Texas Rep. Troy Nairs’ contribution tax fairness law will increase additional revenues of between $70 billion and $112 billion over a decade, depending on future return on donation investment. According to Analysis from the Tax Foundation.

His bill would increase the excise tax imposed on certain universities’ contribution investment returns from 1.4% to 21%. This is the same tax rate that commercial companies pay. Nehls told the DCNF it is pushing for the bill to be included as a provision for the expected tax and expenditure bill.

“Specific elite private universities While sitting accumulating in large donations, most hardworking Americans paid less than 2% of tax on investment returns, which are far lower than what most hardworking Americans pay in taxes,” the lawmaker told DCNF.

WASHINGTON, DC – April 30: Rep. Vern Buchanan (R-FL) will speak at a hearing with the House Committee on April 30, 2024 at the Longworth House Office Building in Washington, DC. During the hearing of Treasury Janet Yellen Greach, he answered a variety of questions related to President Joe Biden’s tax and spending policies, as well as issues related to cost-of-living. (Photo: Anna Money Maker/Getty Images)

Other legislative proposals will increase the number of universities required to pay donation tax.

Republican Florida Rep. Vern Buchanan’s Protected American Student Act expands the scope of universities eligible for donation tax by excluding non-citizen students from the donation tax calculations. Buchanan’s office estimate Donations from 10 to 12 more universities, including Columbia University and Cornell University, are subject to excise tax if the bill is signed into law. All donations from these schools are at least $750 million, according to Buchanan.

“I am committed to working with President Trump to create the ‘American first’ tax law. This puts American students and families first, while ending the generous tax credits of institutions that refuse the same,” Buchanan said in a statement. “I also fully support President Trump’s efforts to take responsibility for allowing so-called “elite” universities to spread hatred and violence on university campuses. ”

Similarly, the Donation Accountability Act of Republican New York State Rep. Mike Lawler ensures that more universities pay taxes on investment returns by reducing the per-student contribution ratio from $500,000 to $200,000 per person. The Roller bill would do that too. increase The tax rate for donations at certain universities is 8.6%.

“If these institutions are not using resources to lower tuition fees, expand financial aid and improve student services, they should pay an equitable share,” Lawler said in a February press release.

Less than half of the university’s contribution expenditures were spent on student financial aid, according to financial year 2024 data from the National Association of Colleges and University Business Officers and the asset management company CommonFund.

Speaker Mike Johnson has raised an ambitious timeline of sending Trump-backed taxes to the president’s desk by anniversary. Trump calls future laws “one big, beautiful bill.” Three offices with knowledge of the tax portion of the budget adjustment package informed the DCNF that all options remain on the table regarding the potential expansion of the Bill’s University Fund Tax.

Some conservative economists see taxes on donation benefits as simple for Congressional Republicans.

“We’ve seen at least $1 billion in donations swell and scores over $1 billion,” Stephen Moore, a senior fellow at the Heritage Foundation and co-founder of Unleash Prosperity, wrote in the Daily Caller News Foundation Op-Ed in March. “We should call these schools a loophole… [e]These enormous donations have led to university tuition rising at two to three times the rate of inflation. The argument that tax-free donations make universities more affordable has proven patently false. ”

“Universities need to pay an equitable share and their income must be used to help Trump pay tax cuts, which will benefit everyone,” he adds, characterizing the elite university as “the world’s richest institution, the richest institution in the world.”

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